When the price of a product falls,the income effect induces the consumer to purchase more of it while the substitution effect prompts her to buy less.

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Jeremy Contreras · Accepted Answer

Final Answer : False, Explanation :  The substitution effect prompts the consumer to buy more of the product because it has become relatively cheaper compared to other goods, while the income effect, depending on whether the good is normal or inferior, generally also induces the consumer to purchase more because their purchasing power has effectively increased.

When the price of a product falls,the income effect induces the consumer to purchase more of it while the substitution effect prompts her to buy less.

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